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This is a Bill, not an Act. For current law, see the Acts databases.
PAY-ROLL TAX AMENDMENT (HARMONISATION) BILL 2008
Serial 148
Pay-roll
Tax Amendment (Harmonisation) Bill 2008
Ms
Lawrie
A Bill for an Act to amend the
Pay-roll Tax Act, and for related purposes
NORTHERN TERRITORY OF
AUSTRALIA
pay-roll tax amendment
(harmonisation) ACT 2008
____________________
Act No. [ ] of
2008
____________________
TABLE OF PROVISIONS
NORTHERN
TERRITORY OF AUSTRALIA
____________________
Act No. [ ] of
2008
____________________
An Act to amend the Pay-roll Tax
Act, and for related purposes
[Assented to [ ]
2008]
[Second reading [ ]
2008]
The Legislative Assembly of the Northern
Territory enacts as follows:
Part
1 Preliminary
Short title
This Act may be cited as the Pay-roll Tax
Amendment (Harmonisation) Act 2008.
This Act commences on 1 July 2008.
Part 2 Amendment of Pay-roll Tax
Act
Act amended
This Part amends the Pay-roll Tax
Act.
New Part 1, Division 1
heading
Before section 1
insert
Division
1 Formal provisions
New Part 1, Division 2
heading
After section 2
insert
Division
2 Interpretative provisions
Amendment of section 3
(Interpretation)
(1) Section 3(1), definitions designated group
employer, group, prescribed benefit and
related
omit
(2) Section 3(1)
insert (in alphabetical
order)
designated group employer means the
member of a group who is for the time being the designated group employer for
the group under section 17P.
director, of a company, includes a
member of the governing body of the company.
group, see section
17A.
ITAA means the Income Tax
Assessment Act 1997 (Cth).
option means an option or right,
whether actual, prospective or contingent, of a person to acquire a share or to
have a share transferred or allotted to the person.
paid, in relation to wages, includes
provided, conferred and assigned and pay and payable
have corresponding meanings.
private unit trust scheme, see section
56C(1) and (1A) of the Stamp Duty Act.
public unit trust scheme means a unit
trust scheme that is not a private unit trust scheme.
share means a share in a company and
includes a stapled security as defined in section 139GCD of the Income Tax
Assessment Act 1936 (Cth).
unit trust scheme, see section 4(1) of
the Stamp Duty Act.
(3) Section 3(1), definition
wages
omit
means wages,
substitute
means wages, remuneration,
(4) Section 3(1), definition wages,
paragraphs (b) and (baa)
omit
or a member of the governing body
(5) Section 3(1), definition wages,
paragraph (cb)
omit, substitute
(cb) a termination payment that constitutes wages
under section 3S; and
(6) Section 3(1), definition wages,
paragraph (e)
omit, substitute
(e) the value of a fringe benefit, shares or options
that is, under Division 4 or Division 7, taken to be part of the wages paid or
payable by the employer; and
(7) Section 3(3)(a)
omit
(8) Section 3(4)
omit
or prescribed benefit
New Part 1, Division 3
heading
After section 3
insert
Division
3 Superannuation benefits
Amendment of section 3A (Superannuation
benefits)
Section 3A(1) and (3)
omit (all references)
the Schedule
substitute
Schedule 1
New Part 1, Division 4
heading
After section 3A
insert
Division
4 Fringe benefits
Section 3C
repeal
New Part 1, Division 5
heading
Before section 3D
insert
New Part 1, Divisions 6, 7 and
8
After section 3D
insert
3E Motor vehicle
allowances
(1) For the purposes of this Act,
wages, in respect of a financial year, do not include the exempt
component of a motor vehicle allowance paid or payable in respect of that
year.
(2) Accordingly, if the total motor vehicle
allowance paid or payable to an employee in respect of a financial year does not
exceed the exempt component, the motor vehicle allowance is not
wages for the purposes of this Act.
(3) If the total motor vehicle allowance paid or
payable to an employee in respect of a financial year exceeds the exempt
component (if any), only that amount that exceeds the exempt component of the
motor vehicle allowance is included as wages for the purposes of
this Act.
(4) The exempt component of a motor
vehicle allowance paid or payable in respect of a financial year is calculated
in accordance with the formula:
E = K
R
where:
E is the exempt component; and
K is the number of business kilometres travelled
during the financial year; and
R is the exempt rate.
(5) The number of business kilometres
travelled during the financial year ("K") is to be determined in
accordance with the continuous recording method, or the averaging method,
whichever method is selected and used by the employer in accordance with
Schedule 2.
(6) The Commissioner, by order in writing, may
approve the use, by an employer or class of employer, of another method of
determining the number of business kilometres travelled during the financial
year (including the use of an estimate). If so, the number of business
kilometres travelled during the financial year is to be determined in accordance
with the method approved by the Commissioner.
(7) For the purposes of this section, the
exempt rate for the financial year concerned is:
(a) the rate prescribed by the regulations under
section 28-25 of the ITAA for calculating a deduction for car expenses for a
large car using the cents per kilometre method in the financial
year immediately preceding the financial year in which the allowance is paid or
payable; or
(b) if no rate referred to in paragraph (a) is
prescribed, the rate prescribed by the regulations under this
Act.
3F Accommodation
allowances
(1) For the purposes of this Act,
wages do not include an accommodation allowance paid or payable to
an employee in respect of a night's absence from the person's usual place of
residence that does not exceed the exempt rate.
(2) If the accommodation allowance paid or payable
to an employee in respect of a night's absence from the person's usual place of
residence exceeds the exempt rate, wages include that allowance
only to the extent that it exceeds the exempt rate.
(3) For the purposes of this section, the
exempt rate for the financial year concerned is:
(a) the total reasonable amount for daily travel
allowance expenses using the lowest capital city for the lowest salary band for
the financial year determined by the Commissioner of Taxation of the
Commonwealth; or
(b) if no determination referred to in
paragraph (a) is in force, the rate prescribed by the
regulations.
Division
7 Shares and options
3G Inclusion of grant
of shares and options as wages
(1) For the purposes of this Act,
wages include the grant of a share or option to or in relation to
an employee by an employer in respect of services performed by the
employee.
(2) Any such wages are taken, for the purpose of
the imposition of
pay-roll tax, to be paid or
payable on the relevant day.
(3) For the purposes of this Division, the
relevant day is the day that the employer elects in accordance
with this Division to treat as the day on which the wages are paid or
payable.
(4) To avoid doubt, the grant of a share or option
to, or in relation to, an employee or director may constitute remuneration of
the employee or director.
3H Choice of relevant
day
(1) The employer can elect to treat as the
relevant day either the date on which the share or option is
granted to the employee or the vesting date.
(2) A share or option is granted to a
person in the following circumstances:
(a) in the case of a share – if the person
acquires the share (as defined in section 139G of the Income Tax
Assessment Act 1936 (Cth)) or in the circumstances prescribed by the
regulations under this Act;
(b) in the case of an option – if the person
acquires a right (as defined in section 139G of the Income Tax
Assessment Act 1936 (Cth)) to the share to which the option relates or
in the circumstances prescribed by the regulations under this
Act.
(3) The vesting date, in respect of a
share, is the date on which the share vests in the employee (that is, when any
conditions applying to the grant of the share have been met and the employee's
legal or beneficial interest in the share cannot be rescinded).
(4) The vesting date, in respect of
an option, is 1 of the following dates (whichever happens
first):
(a) the date on which the share to which the option
relates is granted to the employee;
(b) the date on which the employee exercises a right
under the option to have the share the subject of the option transferred to,
allotted to or vest in him or her.
3J Deemed choice of
relevant day in special cases
(1) If an employer grants a share or an option to
an employee and the value of the grant of the share or option is not included in
the taxable wages of the employer for the financial year in which the share or
option was granted, the employer is taken to have elected to treat the wages
constituted by the grant of that share or option as being paid or payable on the
vesting date.
(2) If an employer grants a share or an option to
an employee and the value of the grant of the share or option is nil or, if the
employer were to elect to treat the date of grant as the relevant day, the wages
constituted by the grant would not be liable to pay-roll tax, the employer is
taken to have elected to treat the wages constituted by the grant of that share
or option as being paid or payable on the date on which the share or option was
granted.
3K Effect of
rescission, cancellation of share or option
(1) If the grant of a share or option is withdrawn,
cancelled or exchanged before the vesting date for any valuable consideration
(other than the grant of other shares or options), the following provisions
apply:
(a) the date of withdrawal, cancellation or exchange
is taken to be the vesting date of the share or option;
(b) the market value of the share or option, on the
vesting date, is taken to be the amount of the valuable consideration (and,
accordingly, that amount is the amount paid or payable as wages on that
date).
(2) If an employer includes the value of a grant of
a share or option in the taxable wages of the employer for a financial year
commencing on or after the commencement of this section, and the grant is
rescinded because the conditions attaching to the grant were not met, the
taxable wages of the employer, in the financial year in which the grant is
rescinded, are to be reduced by the value of the grant as previously included in
the taxable wages of the employer.
(3) Subsection (2) does not apply just because an
employee fails to exercise an option or otherwise to exercise his or her rights
in respect of a share or option.
3L Grant of share
pursuant to exercise of option
The grant of the share by an employer does not
constitute wages for the purposes of this Act if the employer is required to
grant the share as a consequence of the exercise of an option by a person
and:
(a) the grant of the option to the person
constitutes wages for the purposes of this Act; or
(b) the option was granted to the person before
1 July 1999.
3M Value of shares
and options
(1) If the grant of a share or option constitutes
wages under this Division, the amount paid or payable as wages is taken, for the
purposes of this Act, to be the market value of the share or option (expressed
in Australian currency) on the relevant day, less the consideration (if any)
paid or given by the employee in respect of the share or option (other than
consideration in the form of services performed).
(2) The market value of a share or option on the
relevant day is to be determined in accordance with the Commonwealth income tax
provisions.
(3) For that purpose, the Commonwealth income tax
provisions apply with the following modifications, and any other necessary
modifications:
(a) the market value of an option is to be
determined as if it were a right to acquire a share;
(b) a reference to a taxpayer is to be read as a
reference to the employee;
(c) a reference to the Commissioner of Taxation is
to be read as a reference to either that Commissioner or the Commissioner of
Territory Revenue.
(4) Section 3B does not apply to the grant of a
share or option that constitutes wages, even if it constitutes a fringe
benefit.
(5) In this section:
Commonwealth income tax provisions
means the provisions of Part III, Division 13A, Subdivision F of the Income
Tax Assessment Act 1936 (Cth).
3N Inclusion of
shares and options granted to directors as wages
(1) For the purposes of this Act,
wages include the grant of a share, or option, by a company to a
director of the company by way of remuneration for the appointment or services
of the director that would be wages under this Division if the director were an
employee of the company.
(2) For that purpose, the other provisions of this
Division apply in respect of any such grant as if a reference to the employer
were a reference to the company and a reference to the employee were a reference
to the director of the company.
(3) In this section, a reference to a director of
the company includes a reference to the following:
(a) a person who, under a contract or other
arrangement, is to be appointed as a director of the company;
(b) a former director of the
company.
(4) In the case of wages constituted by the grant
of a share or option by a company to a director of the company by way of
remuneration for the appointment of the director, but not for services
performed:
(a) the grant of the share or option is taken, for
the purposes of this Act, to be paid or payable for services performed during
the month in which the relevant day occurs; and
(b) a reference in this Act to the place or places
where services are performed is a reference to the place or places where it may
reasonably be expected that the services of the director in respect of the
company will be performed.
3P When services
considered to have been performed
For the purposes of this Act, if the grant of a
share or an option constitutes wages for the purposes of this Act, the services
in respect of which those wages are paid or payable are taken to have been
performed during the month in which the relevant day occurs.
3Q Place where wages
are payable
(1) The wages constituted by the grant of the share
or option are taken to be paid or payable in the Territory if the share is a
share in a local company or, in the case of an option, an option to acquire
shares in a local company.
(2) In any other case, the wages constituted by the
grant of the share or option are taken to be paid or payable outside the
Territory.
Note
If the wages concerned are taken to be payable
outside the Territory, because the shares concerned are shares in a company that
is not a local company, the grant of the share or option may still be liable to
pay-roll tax under this Act if the grant is made for services performed or
rendered wholly in the Territory (see section 6(1)(b)).
(3) In this section:
local company means:
(a) a company incorporated or taken to be
incorporated under the Corporations Act 2001 that is taken to be registered in
the Territory for the purposes of that Act; or
(b) any other body corporate that is incorporated
under an Act of the Territory.
Division
8 Termination payments
In this Division:
employment termination payment
means:
(a) an employment termination payment as defined in
section 82-130 of the ITAA;
or
(b) a payment that would be an employment
termination payment as defined in section 82-130 of the ITAA but for the fact
that it was received later than 12 months after the termination of a
person's employment; or
(c) a transitional termination payment as defined in
section 82-10 of the Income Tax (Transitional Provisions) Act 1997
(Cth).
termination payment
means:
(a) a payment made in consequence of the retirement
from, or termination of, any office or employment of an employee,
being:
(i) an unused annual leave payment;
or
(ii) an unused long service leave payment;
or
(iii) so much of an employment termination payment
paid or payable by an employer, whether or not paid to the employee or to any
other person or body, that would be included in the assessable income of an
employee under Part 2-40 of the ITAA if the whole of the employment termination
payment had been paid to the employee; or
(b) an amount paid or payable by a company as a
consequence of the termination of the services or office of a director of the
company, whether or not paid to the director or to any other person or body,
that would be an employment termination payment if that amount had been paid or
payable as a consequence of termination of employment.
unused annual leave payment, see
section 83-10 of the ITAA.
unused long service leave payment, see
section 83-75 of the ITAA.
For the purposes of this Act, wages
include a termination payment.
Amendment of section 6 (Pay-roll
tax)
(1) Section 6(1)
omit
1 July 2003
substitute
1 July 2008
(2) Section 6(1)
omit
6.2%
substitute
5.9%
(3) Section 6(2) and (2A)
omit, substitute
(2) Subsection (1) does not apply to wages paid or
payable for services performed by a person wholly in another country for a
continuous period of more than 6 months beginning on the day on which wages were
first paid or payable to that person for services so performed.
Amendment of section 11A (Arrangements for
avoidance of tax may be disregarded)
Section 11A(3)
omit, substitute
(3) For the purposes of this
section:
(a) a reference in subsection (1) to the making of a
payment to a person related to, or connected with, a natural person includes the
provision of a fringe benefit, or the grant of a share or option, to the person
related to, or connected with, the natural person; and
(b) the value of a fringe benefit, share or option
is to be calculated in the same way as if it had been provided or granted by the
employer to the employee.
Amendment of section 11B (Arrangements for
avoidance of tax by labour hire agents)
Section 11B(3)
omit
section 17D
substitute
section 17F
Repeal and substitution of Part
IVA
Part IVA
repeal, substitute
Part
5 Grouping of employers
Division
1 Interpretation
In this Part:
business includes:
(a) a profession or trade; and
(b) any other activity carried on for fee, gain or
reward; and
(c) the activity of employing 1 or more persons who
perform duties for, or in connection with, another business;
and
(d) the carrying on of a trust (including a dormant
trust); and
(e) the activity of holding any money or property
used for, or in connection with, another business;
whether carried on by 1 person or 2 or more persons
together.
group means a group constituted under
this Part, but does not include any member of the group in respect of whom a
determination under Division 4 is in force.
17B Grouping
provisions to operate independently
The fact that a person is not a member of a group
constituted under a provision of this Part does not prevent that person from
being a member of a group constituted under another provision of this
Part.
Division
2 Business groups
17C Constitution of
groups
A group is constituted by all the
persons or bodies forming a group that is not a part of any larger
group.
17D Groups of
corporations
Corporations constitute a group if they are related
bodies corporate as defined in the Corporations Act 2001.
17E Groups arising
from the use of common employees
(1) If 1 or more employees of an employer perform
duties for, or in connection with, 1 or more businesses carried on by the
employer and 1 or more other persons, the employer and each of those other
persons constitute a group.
(2) If 1 or more employees of an employer are
employed solely or mainly to perform duties for, or in connection with, 1 or
more businesses carried on by 1 or more other persons, the employer and each of
those other persons constitute a group.
(3) If 1 or more employees of an employer perform
duties for, or in connection with, 1 or more businesses carried on by 1 or more
other persons, being duties performed in connection with, or in fulfilment of
the employer's obligation under, an agreement, arrangement or undertaking for
the provision of services to any 1 or more of those other persons in connection
with that business or those businesses, the employer and each of those other
persons constitute a group.
(4) Subsection (3) applies to an agreement,
arrangement or undertaking:
(a) whether the agreement, arrangement or
undertaking is formal or informal, express or implied; and
(b) whether or not the agreement, arrangement or
undertaking provides for duties to be performed by the employees or specifies
the duties to be performed by them.
Note
Section 17N allows the Commissioner, for pay-roll
tax purposes, to exclude persons from a group constituted under this section in
certain circumstances.
17F Groups of
commonly controlled businesses
(1) If a person or set of persons has a controlling
interest in each of 2 businesses, the persons who carry on those businesses
constitute a group.
Note
Section 17N allows the Commissioner, for pay-roll
tax purposes, to exclude persons from a group constituted under this section in
certain circumstances.
(2) For the purposes of this section, a person or
set of persons has a controlling interest in a business if:
(a) in the case of 1 person – the person is
the sole owner (whether or not as trustee) of the business; or
(b) in the case of a set of persons – the
persons are together as trustees the sole owners of the business;
or
(c) in the case of a business carried on by a
corporation:
(i) the person or each of the set of persons is a
director of the corporation and the person or set of persons is entitled to
exercise more than 50% of the voting power at meetings of the directors of the
corporation; or
(ii) a director or set of directors of the
corporation that is entitled to exercise more than 50% of the voting power at
meetings of the directors of the corporation is under an obligation, whether
formal or informal, to act in accordance with the direction, instructions or
wishes of that person or set of persons; or
(d) in the case of a business carried on by a body
corporate or unincorporated – that person or set of persons constitute
more than 50% of the board of management (by whatever name called) of the body
or control the composition of that board; or
(e) in the case of a business carried on by a
corporation that has a share capital – that person or set of persons can,
directly or indirectly, exercise, control the exercise of, or substantially
influence the exercise of, more than 50% of the voting power attached to the
voting shares, or any class of voting shares, issued by the corporation;
or
(f) in the case of a business carried on by a
partnership – that person or set of persons:
(i) own (whether beneficially or not) more than 50%
of the capital of the partnership; or
(ii) is entitled (whether beneficially or not) to
more than 50% of the profits of the partnership; or
(g) in the case of a business carried on under a
trust – the person or set of persons (whether or not as a trustee of, or
beneficiary under, another trust) is the beneficiary in respect of more than 50%
of the value of the interests in the first-mentioned trust.
(3) If:
(a) 2 corporations are related bodies corporate as
defined in the Corporations Act 2001; and
(b) 1 of the corporations has a controlling interest
in a business;
the other corporation has a controlling interest in
the business.
(4) If:
(a) a person or set of persons has a controlling
interest in a business; and
(b) a person or set of persons who carry on the
business has a controlling interest in another business;
the person or set of persons referred to in
paragraph (a) has a controlling interest in that other
business.
(5) If:
(a) a person or set of persons is the beneficiary of
a trust in respect of more than 50% of the value of the interests in the trust;
and
(b) the trustee of the trust (whether alone or
together with another trustee or trustees) has a controlling interest in the
business of another trust;
the person or set of persons has a controlling
interest in the business.
(6) A person who may benefit from a discretionary
trust as a result of the trustee or another person, or the trustee and another
person, exercising or failing to exercise a power or discretion, is taken, for
the purposes of this Part, to be a beneficiary in respect of more than 50% of
the value of the interests in the trust.
(7) If:
(a) a person or set of persons has a controlling
interest in the business of a trust; and
(b) the trustee of the trust (whether alone or
together with another trustee or trustees) has a controlling interest in the
business of a corporation;
the person or set of persons is taken to have a
controlling interest in the business of the corporation.
(8) If:
(a) a person or set of persons has a controlling
interest in the business of a trust; and
(b) the trustee of the trust (whether alone or
together with another trustee or trustees) has a controlling interest in the
business of a partnership;
the person or set of persons is taken to have a
controlling interest in the business of the partnership.
17G Groups arising
from tracing of interests in corporations
(1) An entity and a corporation form part of a
group if the entity has a controlling interest in the
corporation.
Note
Section 17N allows the Commissioner, for pay-roll
tax purposes, to exclude persons from a group constituted under this section in
certain circumstances.
(2) For the purposes of this section, an entity has
a controlling interest in a corporation if the corporation has
share capital and:
(a) the entity has a direct interest in the
corporation and the value of that direct interest exceeds 50%;
or
(b) the entity has an indirect interest in the
corporation and the value of that indirect interest exceeds 50%;
or
(c) the entity has an aggregate interest in the
corporation and the value of the aggregate interest exceeds
50%.
(3) Division 3 applies for the purposes of the
interpretation of this section.
Note
Division 3 sets out the manner for determining
whether an entity has a direct interest, indirect interest or aggregate interest
in a corporation, and the value of such an interest.
(4) In this section:
associated person means a person who
is associated with another person in accordance with any of the
following:
(a) persons are associated persons if they are
related persons;
(b) natural persons are associated persons if they
are partners in a partnership;
(c) private companies are associated persons if
common shareholders have a majority interest in each private
company;
(d) trustees are associated persons if any person is
a beneficiary common to the trusts (not including a public unit trust scheme) of
which they are trustees;
(e) a private company and a trustee are associated
persons if a related body corporate of the company (as defined in the
Corporations Act 2001) is a beneficiary of the trust (not including a public
unit trust scheme) of which the trustee is a trustee.
entity means:
(a) a person; or
(b) 2 or more persons who are associated persons (as
defined in this section).
private company means a company that
is not limited by shares, or whose shares are not quoted on the Australian
Securities Exchange or any exchange of the World Federation of
Exchanges.
related person means a person who is
related to another person in accordance with any of the
following:
(a) natural persons are related persons
if:
(i) 1 is the spouse or de facto partner of the
other; or
(ii) the relationship between them is that of parent
and child, brothers, sisters, or brother and sister;
(b) private companies are related persons if they
are related bodies corporate as defined in the Corporations Act
2001;
(c) a natural person and a private company are
related persons if the natural person is a majority shareholder or director of
the company or of another private company that is a related body corporate of
the company as defined in the Corporations Act 2001;
(d) a natural person and a trustee are related
persons if the natural person is a beneficiary of the trust (not being a public
unit trust scheme) of which the trustee is a trustee;
(e) a private company and a trustee are related
persons if the company, or a majority shareholder or director of the company, is
a beneficiary of the trust (not being a public unit trust scheme) of which the
trustee is a trustee.
17H Smaller groups
subsumed by larger groups
(1) If a person is a member of 2 or more groups,
the members of all the groups together constitute a group.
(2) If 2 or more members of a group have together a
controlling interest in a business (within the meaning of section 17F), all the
members of the group and the person or persons who carry on the business
together constitute a group.
Note
Section 17N allows the Commissioner, for pay-roll
tax purposes, to exclude persons from a group constituted under this section in
certain circumstances.
Division
3 Business groups – tracing of interests in
corporations
This Division applies for the purposes of
section 17G.
(1) An entity has a direct interest
in a corporation if:
(a) in the case of an entity that is a person
– the person can, directly or indirectly, exercise, control the exercise
of, or substantially influence the exercise of, the voting power attached to any
voting shares issued by the corporation; or
(b) in the case of an entity that is 2 or more
persons who are associated persons – each of the associated persons can,
directly or indirectly, exercise, control the exercise of, or substantially
influence the exercise of, the voting power attached to any voting shares issued
by the corporation.
(2) The value of the direct interest of the entity
in the corporation is the proportion (expressed as a percentage) of the voting
power of all voting shares issued by the corporation that:
(a) in the case of an entity that is a person
– the person can, directly or indirectly, exercise, control the exercise
of, or substantially influence the exercise of, as referred to in subsection
(1); or
(b) in the case of an entity that is 2 or more
persons who are associated persons – the associated persons can, if acting
together, directly or indirectly, exercise, control the exercise of, or
substantially influence the exercise of, as referred to in subsection
(1).
(1) An entity has an indirect
interest in a corporation if the corporation is linked to another
corporation (the directly controlled corporation) in which the
entity has a direct interest.
(2) A corporation is linked to a directly
controlled corporation if the corporation is part of a chain of
corporations:
(a) that starts with the directly controlled
corporation; and
(b) in which a link in the chain is formed if a
corporation has a direct interest in the next corporation in the
chain.
(3) The following are examples of how subsections
(1) and (2) work (the examples are cumulative):
(a) corporation A (a directly controlled
corporation) has a direct interest in corporation B. Corporations A and B form
part of a chain of corporations, and corporation B is linked to corporation A.
Accordingly, an entity that has a direct interest in corporation A also has an
indirect interest in corporation B;
(b) corporation B also has a direct interest in
corporation C. In this case, corporations A, B and C form part of a chain of
corporations. Both corporations B and C are linked to corporation A. The entity
that has a direct interest in corporation A has an indirect interest in both
corporations B and C;
(c) corporation B also has a direct interest in
corporation D. There are now 2 chains of corporations, 1 consisting of A, B
and C, and 1 consisting of A, B and D. Corporations B, C and D are all
linked to corporation A and an entity that has a direct interest in corporation
A would have an indirect interest in corporations B, C and D. An entity that has
a direct interest in corporation B would have an indirect interest in
corporations C and D. However, an entity that has a direct interest in
corporation C only would not have an indirect interest in corporation D, as
corporation D is not linked to corporation C.
(4) The value of the indirect interest of an entity
in a corporation (an indirectly controlled corporation) that is
linked to a directly controlled corporation is calculated by multiplying
together the following:
(a) the value of the direct interest of the entity
in the directly controlled corporation;
(b) the value of each direct interest that forms a
link in the chain of corporations by which the indirectly controlled corporation
is linked to the directly controlled corporation.
(5) The following are examples of how subsection
(4) works (the examples are cumulative):
(a) an entity has a direct interest (with a value of
80%) in corporation A. Corporation A has a direct interest (with a value of 70%)
in corporation B. The value of the indirect interest of the entity in
corporation B is 80% ´ 70% (that is,
56%). Accordingly, in this example the entity has a controlling interest (as
defined in section 17G) in corporation B;
(b) corporation B also has a direct interest (with a
value of 40%) in corporation C. The value of the indirect interest of the entity
in corporation C is 80% ´ 70%
´ 40% (that is,
224%). Accordingly, in this example the
entity does not have a controlling interest in corporation C.
(6) It is possible for an entity to have more than
1 indirect interest in a corporation. This may occur if the corporation is
linked to more than 1 corporation in which the entity has a direct interest, or
if the corporation is linked to only 1 corporation in which the entity has a
direct interest but is linked through more than 1 chain of corporations. In that
case, the entity has an aggregate interest in the corporation (see
section 17M).
17M Aggregation of
interests
(1) An entity has an aggregate
interest in a corporation if:
(a) the entity has a direct interest and 1 or more
indirect interests in the corporation; or
(b) the entity has more than 1 indirect interest in
the corporation.
(2) The value of the aggregate interest of an
entity in a corporation is the sum of the following:
(a) the value of the direct interest (if any) of the
entity in the corporation;
(b) the value of each indirect interest of the
entity in the corporation.
(3) For example:
(a) an entity has a direct interest (with a value of
40%) in corporation B; and
(b) the entity also has a direct interest (with a
value of 25%) in corporation A, which in turn has a direct interest (with a
value of 60%) in corporation B. Accordingly, the entity also has an indirect
interest in corporation B with a value of 15% (that is, 25%
´ 60%); and
(c) the value of the entity's aggregate interest in
corporation B is the sum of the direct interest (40%) and the indirect interest
(15%), which is 55%; and
(d) accordingly, in this example, the entity has a
controlling interest in corporation B (as defined in section
17G).
17N Exclusion of
persons from groups
(1) The Commissioner may, by order in writing,
determine that a person who would, but for the determination, be a member of a
group is not a member of the group.
(2) The Commissioner may only make such a
determination if satisfied, having regard to the nature and degree of ownership
and control of the businesses, the nature of the businesses and any other
matters the Commissioner considers relevant, that a business carried on by the
person, is carried on independently of, and is not connected with the carrying
on of, a business carried on by any other member of that group.
(3) The Commissioner cannot exclude a person from a
group if the person is a body corporate that, by reason of section 50 of the
Corporations Act 2001, is related to another body corporate that is a member of
that group.
(4) This section extends to a group constituted by
reason of section 17H.
(5) A determination can be expressed to take effect
on a date that is earlier than the date of the determination (but not earlier
than 1 July 2008).
(6) The Commissioner may, by order in writing,
revoke a determination that applies in respect of a person if satisfied that the
circumstances in which a determination may be made do not apply to the
person.
(7) The revocation of a determination can be
expressed to take effect on a date that is earlier than the date of the
determination.
17P Designated
group employer
(1) The Commissioner must, on application by the
members of a group, designate a member of the group as the designated group
employer for the group.
(2) The members of a group may nominate a deduction
(to be calculated as specified by the Commissioner but not exceeding the
prescribed amount fixed under section 8(1)) to be made from taxable wages for
each return period.
(3) The Commissioner may, by notice to the
designated group employer (or the person to become the designated group
employer) for a group, exercise 1 or both the following powers:
(a) in the absence of an application from the
members of the group, the Commissioner may designate a member of the group as
the designated group employer for the group;
(b) in the absence of a nomination made in
accordance with subsection (2), the Commissioner may nominate a deduction
to be made from taxable wages for each return period.
(4) A person ceases to be the designated group
employer in respect of a particular group on and from the first day of the
return period during which:
(a) the composition of the group alters;
or
(b) the members of the group apply to the
Commissioner to have the designation revoked;
whichever first occurs.
(5) If the Commissioner exercises a power under
subsection (3) in respect of a group, the Commissioner:
(a) may, by notice to the designated group employer,
revoke the designation or nomination; and
(b) may further exercise that power in respect of
the group.
(6) For ascertaining the tax payable by a
designated group employer, subject to subsection (7), the amount nominated under
subsection (2) or (3) must be deducted from the amount of taxable wages
included in a return made by, or an assessment relating to, the designated group
employer for the return period ending last before the nomination and any
subsequent return period.
(7) The Commissioner may, on an application in
writing by or on behalf of each person known to the Commissioner to be a member
of a group or on the Commissioner's own initiative, at any time, make a
determination specifying an amount, not exceeding the prescribed amount as
defined in section 8(1), to be deducted for any return period specified or
referred to in the determination (being a return period commencing before, or
after, or the return period in which, the determination is made) from the
taxable wages included in a return made by, or an assessment relating to, an
employer specified in the determination who was, during any such return period,
a member of that group.
(8) The Commissioner may, at any time, by
instrument in writing, revoke a determination made under subsection (7) and any
such revocation has effect on and from the date the determination took effect or
a specified later date.
(9) An employer specified in a determination under
subsection (7) is, on the first day of the first return period specified or
referred to in the determination, taken to have been designated under
subsection (1) as the designated group employer for the group of which the
employer was then a member and will, subject to subsection (4), continue as the
designated group employer for that group.
(10) The Commissioner must, as soon as practicable
after making a determination under subsection (7) or a revocation under
subsection (8), serve notice of the determination or revocation on the
designated group employer for the group concerned.
(1) This section applies in relation to a group in
which:
(a) at least 1 member of the group paid or was
liable to pay, as such a member, taxable wages or interstate wages during the
whole or part of a financial year; and
(b) at least 1 member of the group (whether the same
or a different member) paid or was liable to pay taxable wages on 30 June
of the same financial year.
(2) In this section:
prescribed amount, in relation to a
designated group employer, means the amount calculated in accordance with the
following formula:
where:
TW is the total of the taxable wages paid or payable
by the members of the group, in respect of which that designated group employer
is the designated group employer, during the financial year;
and
IW is the total of the interstate wages paid or
payable by the members of that group during the financial year;
and
C is the number of days in the financial year in
respect of which wages (disregarding foreign wages) were paid or payable by any
member of the group while that designated group employer was the designated
group employer in respect of that group; and
D is the number of days in the financial year.
(3) A reference in this section to the annual
amount of tax paid or payable by the members of a group is a reference to the
amount ascertained by applying the appropriate rate of tax prescribed by section
6 calculated in respect of the full financial year to the amount by
which:
(a) the total of the taxable wages paid or payable
by the members of that group during a financial year;
exceeds:
(b) where:
(i) during that year there was only 1 designated
group employer in respect of that group – the prescribed amount applicable
to that designated group employer; or
(ii) during that year there were 2 or more
designated group employers in respect of that group – the prescribed
amount that, if there had been only 1 designated group employer in respect of
that group during that year, would have been applicable if that designated group
employer had paid all of the taxable wages referred to in paragraph (a) paid or
payable during that year.
(4) A reference in this section to the actual
amount of tax paid or payable in respect of a financial year by the members of a
group is a reference to the amount of tax paid or payable when returns were made
or required to be made under this Act relating to that financial year, being
returns in which the taxable wages referred to in subsection (3)(a) were
included or required to be included.
(5) If the amount of tax paid by way of periodic
payments by the members of a group for a financial year is less than the amount
payable for the financial year, the designated group employer for the group must
pay to the Commissioner, within the time allowed for lodging a return for the
month of June in the relevant financial year (or the return period that includes
that month) the amount required to make up the difference.
(6) If the amount of tax paid by way of periodic
payments by the members of a group for a financial year exceeds the amount
payable for the financial year, the Commissioner must, subject to the
Taxation Administration Act, refund the amount of the excess to the
designated group employer.
17R Adjustment
if group member ceases to pay taxable wages or interstate
wages
(1) This section applies in relation to a group in
which:
(a) at least 1 member of the group paid or was
liable to pay, as such a member, taxable wages or interstate wages during a part
of a financial year; and
(b) no member of the group paid or was liable to pay
taxable wages on 30 June of the same financial year.
(2) In this section:
prescribed amount, in relation to a
designated group employer, means the amount calculated in accordance with the
following formula:
where:
TW is the total of the taxable wages paid or payable
by the members of the group, in respect of which that designated group employer
is the designated group employer, during the prescribed period;
and
IW is the total of the interstate wages paid or
payable by the members of that group during the prescribed period;
and
C is the number of days in the financial year in
respect of which wages (disregarding foreign wages) were paid or payable by any
member of the group while that designated group employer was the designated
group employer in respect of that group, up to and including the last day on
which any member of the group paid or was liable to pay taxable wages;
and
D is the number of days in the financial
year.
prescribed period, in relation to a
group, means part only (being a continuous part) of a financial year for which
at least 1 member of the group paid or was liable to pay taxable wages or
interstate wages up to and including the last day on which taxable wages were
paid or payable by any member of the group.
(3) A reference in this section to the total amount
of tax paid or payable for a prescribed period by the members of a group is a
reference to the amount ascertained by applying the appropriate rate of tax
prescribed by section 6 calculated in respect of the prescribed period to the
amount by which:
(a) the total of the taxable wages paid or payable
by the employers in that group during that prescribed period;
exceeds:
(b) where:
(i) during that prescribed period there was only
1 designated group employer in respect of that group – the prescribed
amount applicable to that designated group employer; or
(ii) during that prescribed period there were 2 or
more designated group employers in respect of that group – the prescribed
amount that, if there had been only 1 designated group employer in respect
of that group during that prescribed period, would have been applicable if that
designated group employer had paid all of the wages referred to in paragraph (a)
paid or payable during that prescribed period.
(4) If the tax payable for a group for a prescribed
period exceeds the amount paid by way of periodic payments for that period, the
designated group employer for the group must pay to the Commissioner, within the
time allowed for lodging a return for the return period in which the prescribed
period ends, the amount required to make up the difference.
(5) Section 17Q(5) and (6) applies in relation to a
group to which this section applies as if:
(a) at least 1 member of the group paid or was
liable to pay, as such a member, taxable wages or interstate wages for the whole
of that financial year; and
(b) the reference in section 17Q(4) to the actual
amount of tax paid or payable in respect of a financial year by the members of
that group included a reference to any tax paid or payable under subsection (4)
by a designated group employer in respect of that group in respect of that
financial year; and
(c) the person, if any, who was the designated group
employer in respect of that group at the time when the group last ceased in that
financial year to have a member who was paying or was liable to pay, as such a
member, taxable wages was the designated group employer in respect of that group
on 30 June in that financial year.
17S Application of
this Part
(1) This Part applies only in respect of a
financial year commencing on or after 1 July 2008.
(2) The provisions of this Act replaced by this
Part continue to apply in respect of earlier financial years.
Amendment of section 59 (Agents and
trustees)
Section 59(2)
omit
Part IVA
substitute
Part 5
Amendment of Schedule
heading
Schedule, heading
omit
Schedule
substitute
Schedule 1
After Schedule 1
insert
Schedule
2 Motor vehicle allowances
1 Definition
In this Schedule:
business journey
means:
(a) a journey undertaken in a motor vehicle by a
person otherwise than in the application of the vehicle to a private use, being
an application that, if the person is paid a motor vehicle allowance for that
use, results in the provision of a fringe benefit (as defined in the FBTA Act)
by the employer; or
(b) a journey undertaken in a motor vehicle by a
person in the course of producing assessable income of the person (as defined in
the Income Tax Assessment Act 1936 (Cth)).
2 Continuous recording
method
If an employer selects the continuous recording
method for the purposes of determining the number of business kilometres
travelled during the financial year, the following details are required to be
recorded by the employer:
(a) the odometer readings at the beginning and end
of each business journey undertaken by the person during a financial year by
means of a motor vehicle provided or maintained by the person;
(b) the specific purpose for which each such
business journey was taken;
(c) the distance travelled by the person during the
financial year in the course of all such business journeys (which is taken to be
the number of business kilometres travelled during the financial
year), calculated on the basis of the odometer readings referred to in
paragraph (a).
3 Averaging method
(1) If an employer selects the averaging method for
the purposes of determining the number of business kilometres travelled during
the financial year, the following details are required to be recorded by the
employer:
(a) the odometer readings at the beginning and end
of each business journey undertaken by the person during the relevant 12-week
period by means of a motor vehicle provided or maintained by the
person;
Note
Clause 4 defines the relevant 12-week
period.
(b) the specific purpose for which each such
business journey was taken;
(c) the distance travelled by the person during the
relevant
12-week period in the course of all
such business journeys, calculated on the basis of the odometer readings
referred to in paragraph (a);
(d) the odometer readings at the beginning and end
of the relevant 12-week period for each motor vehicle provided or maintained by
the person for the purpose of undertaking business journeys;
(e) the distance travelled by each such vehicle
during the relevant 12-week period, calculated on the basis of the odometer
readings referred to in paragraph (d);
(f) the distance travelled by the person in the
course of business journeys undertaken by means of each such vehicle during the
relevant 12-week period, calculated as a percentage of the distance travelled by
that vehicle during that period (the relevant
percentage);
(g) the odometer readings at the beginning and end
of the financial year for each vehicle provided or maintained by the person for
the purpose of undertaking business journeys;
(h) the distance travelled by each such vehicle
during the financial year, calculated on the basis of the odometer readings
referred to in paragraph (g);
(i) the distance travelled by the person in the
course of business journeys undertaken by means of each such vehicle during the
financial year (which is taken to be the number of business kilometres
travelled during the financial year), calculated on the basis that the
percentage of that distance that was travelled by the person in the course of
business journeys undertaken by means of each such vehicle during the financial
year is the same as the relevant percentage.
(2) For the next succeeding 4 financial years after
the first financial year in which odometer details are recorded in accordance
with subclause (1), an employer is not required to calculate the relevant
percentage, or record the details referred to in subclause (1)(a) to (f),
for the person but is required to record the other details referred to in that
subclause.
(3) Accordingly, for the next succeeding 4
financial years after the first financial year in which odometer details are
recorded in accordance with subclause (1), the number of business kilometres
travelled during the financial year is to be calculated (as referred to in
subclause (1)(i)) on the basis of the relevant percentage calculated for the
first financial year.
(4) Despite subclauses (2) and (3), an employer is
required to calculate the relevant percentage for a financial year, and record
the details referred to in subclause (1)(a) to (f), if:
(a) the Commissioner serves a notice on the employer
before the commencement of a financial year during that period directing the
employer to keep the details referred to in subclause (1)(a) to (f) for
that financial year; or
(b) the employer wishes to use the recording method
referred to in this clause for 1 or more additional motor vehicles used by the
person in any financial year or for any other reason.
(5) In a situation referred to in subclause (4),
the new record for the financial year replaces the relevant percentage details
previously recorded and subclauses (2) and (3) apply in relation to the new
record for the financial year as if it were the first financial year in which
odometer details were recorded.
(6) An employer who has adopted and employed the
method of recording referred to in subclauses (2) and (3) for a person for
4 successive financial years must, in the next succeeding financial year,
make a fresh recording of all the details specified in subclause (1) if the
employer intends to continue to use the same method of recording for the person.
Subclauses (2) and (3) then apply in relation to the new record for the
financial year as if it were the first financial year in which odometer details
were recorded.
(7) If the odometer of a motor vehicle is replaced
or recalibrated during any period for which its readings are relevant for the
purposes of this clause, the odometer readings immediately before and after the
replacement or recalibration are to be recorded.
4 Meaning of relevant 12-week
period
(1) In clause 3, relevant 12-week
period means a continuous period of at least 12 weeks, selected by the
employer, throughout which a motor vehicle is provided or maintained by a
person. If the motor vehicle is provided or maintained for less than
12 weeks, the period must be the entire period for which the motor vehicle
is provided or maintained.
(2) The period may overlap the start or end of the
financial year, so long as it includes part of the year.
(3) If the averaging method is used for 2 or more
motor vehicles for the same financial year, the odometer readings for those
motor vehicles must cover periods that are concurrent.
5 Replacing 1 motor vehicle with another motor
vehicle
(1) For the purposes of using the averaging method,
an employer may nominate 1 motor vehicle as having replaced another motor
vehicle with effect from a day specified in the nomination.
(2) After the nomination takes effect, the
replacement motor vehicle is treated as the original motor vehicle, and the
original motor vehicle is treated as a different motor vehicle. An employer need
not repeat for the replacement vehicle the steps already taken for the original
motor vehicle.
(3) An employer must record the nomination in
writing in the financial year in which the nomination takes
effect.
(4) However, the Commissioner may allow an employer
to record the nomination at a later time.
6 Changing method of
recording
(1) An employer may change from using the averaging
method to using the continuous recording method with effect from the beginning
of a financial year if the employer complies with clause 2 in respect of the
financial year.
(2) An employer may change from using the
continuous recording method to using the averaging method with effect from the
beginning of a financial year if the employer complies with clause 3 in respect
of the financial year.
Part 3 Amendment of
laws
Laws amended
The Schedule amends the laws mentioned in
it.
Schedule Amendment of laws
section
|
Provision
|
Amendment
|
|
Omit
|
Substitute
|
|
Pay-roll Tax Act
|
|
|
|
Part I, heading
|
Part I
|
Part 1
|
|
Part III, heading
|
Part III
|
Part 3
|
|
Part IV, heading
|
Part IV
|
Part 4
|
|
Part IX, heading
|
Part IX
|
Part 9
|
|
Pay-roll Tax
Regulations
|
|
|
|
Part I, heading
|
Part I
|
Part 1
|
|
regulation 3, definition employee share
scheme
|
whole definition
|
|
|
Part II, heading
|
Part II
|
Part 2
|
|
Part IIIA, heading
|
Part IIIA
|
Part 3A
|
|
Part IIIB, heading
|
whole heading
|
Part 3B Fringe benefits
|
|
regulations 27A(1) and 27C
|
the Schedule
|
Schedule 1
|
|
regulation 27H
|
whole regulation
|
|
|
Part IIIB, Division 2
|
whole Division
|
|
|
Part IIIC, heading
|
Part IIIC
|
Part 3C
|
|
Part IV, heading
|
Part IV
|
Part 4
|
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